4.1 & 4.2 Flashcards
Marketing
The anticipation and identification of consumer wants and needs. Must satisfy these wants and needs in order to make a profit.
Market Characteristics
Market Size
Market Growth
Competitors and ease of entry
Differentiated Homogeneous products
Segmentation
Market Size
Total level of sales of all producers within a market. Important as manager can assess wether its worth entering.
Can be measured by:
- Volume (units sold)
- Value of goods sold (revenue)
Market Growth
Percentage change in the total size of a market (volume or value) over a period of time. The rate of growth can depend on wether the market is saturated or not.
Competitors and ease of entry
Ease of entry is the lack of barriers to entry for the establishment of new competitors in a market. Normally, the greater the number of competitors, the easier it is for new ones to join.
Differentiated Homogeneous Products
Homogeneous products are goods that are physically identical or viewed as identical by consumers (milk, petrol)
It will be difficult to stand out and charge higher prices.
Segmentation
Dividing the market into distinct groups of consumers who share common tastes or requirements.
Target Marketing
Focusing marketing activity on particular segments and a specific group/type of people.
Mass Marketing
Selling to the whole market using a standardised product and the same marketing activities.
Marketing requirements
- Building trust: promises made need to be delivered
- Time for delivering
- Relationships: long term relationships have to be built in order to achieve customer loyalty
Consumer Services
The formulation, deformulation, technical, consulting and testing of most consumer products.
Product-led Strategies
Businesses are said to be product-oriented when they focus on the product and its production process rather than the wants of the consumer. This works when:
- Lack of competition
- Product is a technological innovation
- Product is of high quality
- Organisation has the confidence and ability to do it (high reputation and high market presence)
Market-led Strategies
A market/customer-oriented business which continually identifies, reviews and analyses consumers’ needs. They are able to:
- Anticipate changes in the market
- Respond to changes in the market
- Meet the challenge of competition
Social (societal) Marketing
This approach considers not only the demands of consumers but also the effects on all members of society involved in some way:
- Can provide a significant competitive advantage
- Can lead to higher prices being charged
Market Share
Percentage of sales in a particular market held by a product/business. Indicates which business is the market leader. Helps evaluate the success or failure of a business.
Market share = (Firms sales in time period / Total market sales in time period) x 100